As far as I am concerned, one of the primary reasons the washout rate for small business owners is so high is because too many investors fail to place enough emphasis on getting the maximum return on every dollar and hour that they put into their small business. Instead, they seem to be more concerned about frivolous stuff like the color of their business cards. In any small business endeavor, a lack of focus, coupled with the inability to prioritize tasks, is a recipe for failure. So, too, is the type of complacency that breeds an “if it ain’t broke, don’t fix it” mentality, which usually results in a stagnant business that’s barely able to keep its head above water. That’s why to my way of thinking, the catch-phrase “easier, faster, and cheaper” should be the mantra of every real estate investor in America. I say this because I’ve learned the hard way that for me to consistently achieve the highest possible rate of return on the money and time that I invest in my business, I must continually analyze, refine, and tweak every aspect of my operation, to make it easier, faster, and cheaper to run. Nowadays, I think of my business as a high performance automobile engine, which must be finely turned and calibrated to run at its optimum speed and maximum efficiency. I can tell you from experience that in order to operate a small business at maximum efficiency and profitability, it takes:1. Personal and financial discipline.2. Organizational skills.3. Management know-how.4. Meticulous planning and attention to detail.5. Prioritization of tasks according to their profit potential.6. Maximum use of available technology.7. Accurate record keeping.8. Maximum use of all the tax benefits that are available to small business owners.It Takes Discipline to Operate a Business at Maximum Efficiency and ProfitabilityIt takes a combination of personal and financial discipline to operate a small business at maximum efficiency and profitability. First, you need to have the initiative and self-discipline that’s required to be successfully self-employed. You must work smart, so you don’t waste your valuable time doing grunt-type tasks that can be hired out. In other words, don’t spend your time cleaning up trash around your office when you should be out searching for customers. Second, you need to possess the financial discipline that’s necessary to operate your small business at maximum profitability. The only way that you’re ever going to be able to keep your spending under control is by:1. Adopting a bottom-line mentality that’s totally focused on maximizing the profitability of your business.2. Operating your business on a bare-bones budget by buying all equipment, supplies, and services at the lowest available prices in your area.3. Keeping close track of operating expenses by carefully reviewing all invoices for errors, overcharges, and bogus charges.Prioritize Tasks according to Their Profit PotentialThe number one question that you must continually ask yourself when you’re working in your small business is: Is what I am doing right this minute the most profitable use of my time? A lot of people fail as small business owners simply because they’re never able to prioritize tasks according to their profit potential. They end up never making a profit because they couldn’t distinguish between what’s important and what’s trivial. As a general rule of thumb, I consider any business function that doesn’t contribute directly to my bottom line to be low priority and best left for after business hours. In other words, if the task at hand isn’t part of the process of completing a real estate transaction that will eventually end with me going to the bank; I put it off until later in the day.Avoid Reinventing the Wheel Every Time You Need to Complete a routine TaskWhatever you do, don’t fall into the trap of reinventing the wheel every time you need to complete a routine task. The term, reinventing the wheel, refers to re-creating something from scratch. An example of reinventing the wheel would be retyping standard documents, such as purchase agreements, over and over again, instead of storing them in a Microsoft Word document file where they can be printed out as needed. The point here is to work smart by making your operating as streamlined as humanly possible.Operate Your Small Business on a Bare-Bones BudgetOne surefire way to fail as a small business owner is to run your operation in a slipshod manner with no financial controls in place to keep your operating costs from going through the roof.Do a Cost-Benefit Analysis before You Make a PurchaseI suggest that you do what I always do, before I ever part with any of my hard-earned money, and ask yourself this very poignant question: How exactly is this-(fill-in-the-blank)–going to have a direct impact on the profitability of my business? Unless you can justify to yourself why the purchase under consideration will immediately contribute to your bottom line, you should hold onto your money. This type of decision-making process is referred to in business schools as “cost-benefit analysis,” which means that if the cost outweighs the benefit that’ll be gained from purchasing an item, it shouldn’t be bought. Keep this in mind the next time that you get the urge to splurge.What You Should Have When You Set Up Shop as a Small Business OwnerI am willing to concede that an owner could possibly run their small business without any of the basic amenities of a modern high-tech office at their disposal. However, it would be a very inefficient operation, and I am willing to bet that most small business owners, in this type of work environment, would end up spending much of their time performing tedious tasks such as retyping the same documents over and over again. I don’t know about you, but I’ve never met anyone who has typed their way to a fortune as a small business owner. As far as I am concerned, every neophyte small business owner, who’s really serious about consistently making money in their small business, should have the following six items when they set up shop:1. Telephone service and a prepaid telephone calling card to make calls on the road from pay phones.2. Personal computer with Microsoft Windows operating system.3. Microsoft Word software.4. Internet connection.5. Black-and-while laser or inkjet printer.6. Financial calculator.It’s Hard to Succeed in a Digital World Using Horse-and-Buggy TechnologyComputer technology is here to stay, and, if you want to make it as a successful small business owner in today’s digital world, you had better embrace the latest technology and learn how to use it to your advantage. So if you happen to be computer illiterate, the very best advice that I can give you is to buy an inexpensive personal computer (PC) and then jump in with both feet and learn how to use it. If someone with a nontechnical background like me can use a computer, anyone can.What It Takes to Run a Small Business at Maximum EfficiencyAccording to the Small Business Administration (SBA), 80 percent of all new small businesses fail within five years of opening their doors. More often than not, the cause of failure can be directly attributed to an appalling lack of organization and planning on the part of business owners. I hate to come across as some sort of killjoy, but you just can’t throw a business together without any organization and planning and expect it to be an efficient operation. It takes meticulous planning and attention to detail to set up a small business so that it operates at maximum efficiency. The only way that you’re ever going to have a smooth running business is by doing the little things right, such as:1. Maintaining a master to-do checklist to run your business.2. Computerizing all business documents and records.3. Setting up your business so you avoid re-creating anything from scratch.4. Organizing your office so that everything you need is available at your fingertips.Use a Master To-Do Checklist to Run Your BusinessTo keep your business operating at maximum efficiency, I recommend that you do what I’ve done for the past 20 plus years, and maintain a master to-do checklist. I keep my checklist on my computer in a Microsoft Word file. It serves as a combination checklist and appointment calendar. For example, each entry that I make on my checklist, lists the task or appointment along with the completion or meeting date. This way, nothing slips through the crack and tasks are completed on time and appointments are kept.Deduct Your Home Office as a Business ExpenseIn order for a home office to qualify as a business deduction for federal tax purposes, it must be used regularly and exclusively for business purposes. For example, if you’re a part-time real estate investor and a full-time school teacher, who has a home office that you claim as a real estate investment business expense, but you use your office for both your real estate investment business and for grading student papers, your home office deduction would be disallowed if you were ever audited by the Internal Revenue Service (IRS). The IRS would do this because your home office isn’t being used exclusively for business purposes. The best way to make certain that your home office will pass muster with the IRS is to regularly use the space you’re claiming as your home office exclusively as your principal place of business. I comply with the IRS home office use rules by having a home office that’s located in a separate building behind my home-approximately 40 steps one way-and used exclusively for business purposes. My compact home office measures a measly 10 feet long by 10 feet wide and is a scant 100 square feet in size, but it serves its purpose quite well. I like this arrangement, as it allows me to separate my business from my personal life. For more information on how to deduct your home office as a business expense, read IRS Publication 587, Business Use of Your Home, which is available online at the IRS Publications and Forms Web site.Accurate Record Keeping Is an Integral Part of Running an Efficient BusinessMaintaining accurate records is an integral part of running any type of successful business. Yet, it’s probably the most overlooked aspect of the real estate investment business. For many small business owners record keeping is last minute ritual that’s performed annually around 8 P.M. on the fourteenth of April, and forgotten about the other 364 days of the year. Needless to say, this is definitely not the smart way to run a business. Here’s a listing of the five types of records that real estate investors must maintain in order to have a smooth and efficiently running business:1. Income records: Income records include monthly income and expense statements, bank statements, and accounting records documenting all of the income generated by your real estate investment business.2. Expense records: Expense records include paid invoices, bank statements, cancelled checks, and accounting records documenting all of the expenses associated with operating your business.3. Property records: Property records include mortgages, deeds of trust, promissory notes, grant and warranty deeds, surveys, purchase agreements, property appraisal reports, closing documents, easements, blueprints, certificates of occupancy, construction warranties, building material warranties, equipment warranties, building inspection reports, termite and pest inspection reports, and utility services account information.4. Insurance records: Insurance records include property and casualty insurance policies, title insurance policies, workers’ compensation insurance policies, flood insurance policies, liability insurance policies, umbrella insurance policies, automobile and truck insurance policies, pest control insurance policies, and equipment insurance policies.5. Tax records: Tax records consist of property tax assessment notices, property tax payments, federal tax returns, federal withholding-tax payments, state tax payments, and county and city occupational license fee payments.Store Original Copies of Records and Documents in a Safe Deposit BoxI recommend that you photocopy or scan all of your important property related records and documents onto a CD-ROM and store all of the original copies in a safe deposit box. This way, you’ll have all of your original records and documents in a safe, secure, off-site location where they can be easily located in case of an emergency.Use Generally Accepted Accounting Practices to Maintain Financial RecordsOver the past couple of years, there have been a slew of court cases involving fraudulent accounting practices in which CEOs and other corporate higher-ups “cooked the books” to prop up the value of their company’s stock. Unless a stay at a “Club Fed” facility appeals to you, it’s best that you stick with generally accepted accounting practices instead of using creative accounting methods, which are based on fuzzy mathematics. In basic accounting jargon, the term generally accepted accounting practices (GAAP) refers to accounting principles and practices that are standard in a certain industry. The best way that I know to keep bookkeeping straight is to use an off-the-shelf computer software accounting program such as QuickBooks financial software. This way, all you have to do is enter your financial data and the software does the accounting functions and balances the books and makes it easy for you to:1. Identify the source of receipts.2. Keep track of tax-deductible expenses.3. Document expenses claimed on tax returns.4. Prepare tax returns.Deduct All Business-Related Travel ExpensesMake certain that you deduct the cost of all travel expenses related to running your real estate investment business. The Internal Revenue Service requires that taxpayers maintain automobile mileage logs to document business-related mileage that’s claimed on federal tax returns as a business expense. The standard mileage rate that can be deducted from federal taxes for the cost of operating a vehicle on business-related travel changes each tax year.Depreciate All of the Equipment Used in Your Small BusinessIn order for your small business to earn a maximum profit, you must take full advantage of all of the depreciation allowed under the Internal Revenue Code. To do this, make certain that you claim the maximum depreciation allowed on all of the equipment used in your business to include:1. Office furniture and equipment such as computers, printers, and facsimile machines.2. Software programs for accounting and word processing.3. Cellular telephones, telephones, and telephone answering machines.How to Prepare Your Tax ReturnsFor years, I’ve advised small business owners to hire a tax professional, such as a certified public accountant, board-certified tax attorney, or an enrolled agent, who is licensed to represent taxpayers before all administrative levels of the Internal Revenue Service to prepare their tax returns. I made this recommendation because of the very real possibility that an unreported glitch in an off-the-shelf tax preparation software program could cause an investor’s tax return to be audited. And then the investor would be on their own, as no one from the tax preparation software company is going to represent them in front of the Internal Revenue Service during an audit. However, I’ve had a change of heart after using the Turbo Tax Business tax preparation software program, which is made by Intuit, Inc., to prepare my federal tax returns. I’ve found Turbo Tax Business to be relatively easy to use and a fast, safe, and economical way for me to prepare my tax returns in the privacy and comfort of my home office. And it’s the same tax preparation program that the enrolled agent, who previously prepared my tax returns, uses. I very seriously doubt that the chance of my taxes being audited has been significantly increased by preparing my own returns. But if you’re not comfortable preparing your own tax returns, I recommend that you hire a licensed tax professional to do it for you. For more information of the Turbo Tax Business tax preparation software program, log onto the Turbo Tax Web site.Use the U.S. Master Tax Guide as a GuideI highly recommend that you use the U.S. Master Tax Guide as your tax reference guide. It’s published annually by CCH Tax and Accounting and is available for purchase online at the CCH Tax and Accounting Web site.
Auction Listings Are Vital to the Success of Fundraising Auctions
Fundraising Auction Tip: You should always provide potential bidders with a printed Auction Listing of both your Live and Silent Auction items at any Fundraising Auction. A printed Auction Listing is vital for several reasons:
An Auction Listing informs bidders of the order of sale, and what is coming up next. If you keep your bidders guessing, they will simply not bid.
If bidders are not 100% certain of what they are bidding on, they will not bid. A printed Auction Listing should answer any and all questions about what is being sold in order to encourage bidders to bid as much as possible.
Bidders often need time to plan their bidding strategies, especially on multiple and/or larger value items. A printed Auction Listing helps them to do that.
Couples often need time to consult with each other about what they are willing to spend on something. A printed Auction Listing helps them to do that.
Potential bidders need to know the specifics, the benefits, and the restrictions on any item they are going to bid on, especially on travel and/or other higher value items. A printed Auction Listing should answer all of their questions, in writing.
After bidders see that they have lost an item to another bidder, a printed Auction Listing makes it easier for them to re-strategize on what else they can bid on.
Printed Auction Listings generally come in 3 forms:
Printed in the Event Program or Auction Catalog.
Printed on loose sheets of paper and hand-inserted into the Event Program or Auction Catalog.
Printed on loose sheets of paper and hand-delivered to all attendees, or left on each dinner table in the room.
Auction Listings cost practically nothing to produce and they can make the difference between the success and failure of a Live and Silent Auction. You should never conduct a Fundraising Auction without one.
A Case Study
Let me share a real-life experience with you. Once I was hired to conduct a Fundraising Auction for a nationally renowned organization. The event was held in a major hotel, in one of the country’s largest cities, with several hundred “black tie” participants attending. It was an extremely professional event, with the music, singing, lighting, speeches, and awards all perfectly timed and choreographed. Everything was done to perfection… exception the Fundraising Auction.
Although I had signed an agreement to serve as their Auctioneer nearly one year in advance of the event, no one bothered to contact me for any advice or help. Approximately one week prior to the Auction date, I contacted the group to see if they had replaced me with another Auctioneer. But they said that I was still their man.
Upon arriving at the event I asked for a copy of the Auction Listing. I was told that there were none. I’m not sure whether they felt that the Auction Listing wasn’t necessary, or whether someone forgot to have them printed. This was never made clear. When I asked what I was to use at the podium, I was told to copy the list of Live Auction items from a committee member’s computer. It took me about 30 minutes to copy three pages of hand-written notes in order to prepare for my role as their Auctioneer.
I knew that they had created a PowerPoint program showing the various Live Auction items. When I asked whether the PowerPoint slide order corresponded to the order of sale I had copied from the committee member’s computer, I was met with a blank stare. The committee member left to check the slide order, and returned to let me know that the slide order did not correspond my notes, and he provided me with the correct slide order… hand-written on a paper napkin. This forced me to re-arrange my three pages of hand-written notes before taking the podium.
There was a Live Auction Table with descriptions of the Live Auction items that were to be sold, but the table was not clearly marked, and it received significantly less attention than the Silent Auction Tables, which were clearly identified. Since the Live Auction Table was located adjacent to the “Raffle Table”, it appeared that most people thought it was part of the raffle and therefore paid very little attention to it.
According to the event program (which did not include an Auction Listing), I knew approximately when I was to begin the Live Auction. At the designated time the Master of Ceremonies announced the start of the Live Auction to the several hundred people in attendance, and introduced me as Auctioneer. As I approached the podium I realized that photographs of award winners were still being taken… directly in front of the podium where I was to stand… which required me to stand aside for several minutes until the photographers were done. Can we say “awkward moment”?
As the photographers cleared, I approached the podium and began my Live Auction introduction. Approximately one minute into my introduction, the “Raffle Committee” approached the podium and stopped my Live Auction Introduction in order to pull the 8 or 9 Raffle Winners. These drawings lasted about 5 minutes. Upon it’s conclusion I was allowed to resume the start of the Live Auction.
When standing at the podium two intense and extremely bright spotlights were pointed directly at the podium. The lights were so bright that I literally could not see the center 1/3 of the room. I could see the tables on the right, and on the left, but was totally blinded when looking straight ahead. It took perhaps five minutes before the spotlights were turned off.
While at the podium and describing Lot #1, I had to ask someone to start the Lot #1 PowerPoint Slide… because apparently no one was assigned that job.
So with only the Auctioneer’s verbal description, and a PowerPoint slide, it appeared that few people in the room had any idea about what we were selling… or when we were selling it… until it was announced by the Auctioneer. As a result, bidding was extremely light and the final results fell several thousands of dollars short of where they should have been
The learning experience is this:
The Live Auction is where you place your better items, and where the real money should be made at any Fundraising Auction. Let bidders know as far in advance as possible what you will be selling, and the order of sale, so they can get excited about the Auction, and plan their bidding strategy accordingly.
Auction Listings are absolutely vital to the success of both Live & Silent Auctions. In my opinion, revenues at this Auction fell thousands of dollars short of where they should have been, because no Auction Listing was provided to the guests.
If bidders are not perfectly clear on what is being sold, including both the item’s specifics, benefits, and restrictions, they will not bid.
When you have a committee of volunteers, especially volunteers having full time jobs and/or very busy schedules, the services of a professional Fundraising Auctioneer can help to keep the committee on track.
And once you retain the services of a professional Fundraising Auctioneer… use the services that you are paying for.
Your Home Based Business And Your Get-Rich-Quick Dreams
If you see your Home Based Business as a way to realise your get-rich-quick dreams, please read here. This could save you money, time and many disappointments.We are bombarded with stories in the media about people that have made their billions of dollars at a very young age or very quickly. These “idols” as some people see them become “role models” for many people to start and develop their Home Based Business ideas or other business ideas.We also read about people winning big bucks in the lottery or at a casino or by betting on horses or something else. Are they also “idols” or “role models”?I do believe that there are some similarities and differences between these two groups of “idols” that can help you and me in thinking, dreaming and conceptualizing our big ideas and big awards for our Home Based Businesses.Let us think about our ideas and dreams.If you are dreaming only of getting big bucks very quickly with a minimum of input or work or expertise, the best probability of getting that will be at a casino or by buying a lottery ticket. In both these cases, you will be able to calculate the statistical probability of getting the big bucks. You know that it is very, very small. Nevertheless, some people are winning. They do get the big bucks against all odds. So you can too. Why not? You can decide.If your dreams are to get the big bucks with your Home Based Business very quickly, it is possible. The probability is bigger compared to playing the lotto. The opportunities are there. What must be done to achieve it is different to the lotto. You must have the idea that can be monetized. You will need special skills, business expertise, technological know-how and many other things to monetize your big idea to make big bucks quickly.If you do have all these ideas, resources and many more dreams, it can be done.There are examples of people that have done it. Some people have started their enterprises in their garages at home and developed it into a Fortune 500 company. You might be the next Bill Gates… Go for it. He has proven that it can be done.We must realize that these people are the exceptions though.If your dream is only to make money in your Home Based Business, you will be mislead by the internet gurus explaining or trying to convince you to pay them some money once off or on a monthly basis to get access to their get-rich-quick scheme. With most of these schemes, you will be disappointed because you do not hear the whole story during their sales pitch to you. They are very good and convincing sales people that can sell ice to the Eskimos. Be careful.The more realistic journey to you big money dreams must be different if you are realistic.I want to discuss the realistic dreams and that journey to achieve our dreams.What is more important is to have realistic expectations of what you want to achieve. You have to take into consideration what your strengths and talents are, how much time you have available to spend on your Home Based Business and how much money you want to invest into your business.These are the “hard issues” that can be calculated. Maybe the more important issue to get clarity on is what your passion is. What is you motivation? How strongly do you want to make a success of your Home Based Business? Are you willing to sacrifice to achieve your goal? Do you have the motivation and the stamina to push ahead if the tide is going against you in your Home Based Business? Get clarity about these softer issues before you start.Spend some time by doing some research to find the Home Based Business that suits your requirements. That might not be the one that gives you the big bucks very quickly. The possibility of making a success and earning money with your Home Based Business is bigger if you live and work your passion than when you only go for the money and get involved in something that you do not enjoy.Find your passion in your Home Based Business. Work your passion. Do not get involved in a Home Based Business as if it is a get-rich-quick scheme. It is not a get-rich-quick scheme. Do your research and find your passion. Build a business over time by living your dream and working your passion. By doing that, the possibility of being a Bill Gates is bigger compared to the gambling alternative.Join our team, we will guide you on this journey.